Emergency Services

Question: What is the relationship between the emergency department, trauma center and air ambulance? How should expenses for these services be separated or combined to determine if there is a loss, to count as a community benefit Subsidized Health Service? Example: if the hospital is a level 1 trauma center, should trauma services be separated from other emergency department expenses or considered as one entity?

Recommendation:The following should be considered when reporting emergency services as a subsidized health service:

Review IRS instructions on what qualifies as a subsidized health service. (See Community Benefit Categories and Definitions in CHA's A Guide to Planning and Reporting Community Benefit).

When determining what information to use to calculate the subsidized loss, consider regulatory or practice standards for the service. For example, if operating a trauma center requires operating an emergency department, include the losses of both the emergency department and trauma center. If operating an air ambulance service requires having a trauma center, combine losses of those two programs.

Consider income that is generated from the service before reporting as a community benefit. For example, if a specific service (such as air ambulance) operates at a loss, but generates revenue (for example in the trauma center) it should be considered a cost of doing business, not a subsidized health service.

If an air ambulance is used to transport patients to other facilities and therefore is operated as a community service, those costs (expense minus fees collected) can be reported as community benefit.

(Updated November 2015)

Please Take Note: The information provided does not constitute legal or tax advice. The material is provided for informational/educational purposes only. Please consult with counsel regarding your organization's particular circumstances.